Flagstar’s Sandro DiNello: “I’m Not Trying To Change The World”

Allessandro P. DiNello has been a believer in equality and racial justice since his early days growing up in Detroit, which, in 1967, became the site of some of the most violent and destructive racial riots in the country. “I’ve felt this way as far back as I can remember,” Flagstar Bank’s CEO told Chief Executive in an interview. “But feeling that way and being able to do something about it are two very different things.”

In several decades at the company, prior to becoming CEO in 2013, DiNello says he never heard any leader talk about diversity. “That term wasn’t even used for many years, but they never discussed hiring minorities. It was always more in a negative context—’Oh my God, we have to worry about affirmative action” or this or that. So when I became CEO, then it was, ‘Okay—you’ve always felt this way, now you’re in a position to do something about it.’”

He began, slowly, making change at Flagstar, and in 2017, joined a coalition of CEOs pledging to advance diversity and inclusion in the workplace, more recently taking an active role in speaking on the topic and evangelizing the benefits of D&I to his peers. In the following interview, edited for length, DiNello shares his experience and how he’s making the bank better by sharing his authentic self with employees.

Why is this a priority for you?

There are two principle reasons. I am convinced, first of all, that it is in the company’s best interest from an operational and profitability point of view. That starts with my strong belief that your people are your most important asset, and if your people really care about their company, there’ll be much more caring about their work and therefore more productive. And if they’re caring about their work and more productive, they’re going to provide service levels that maybe are better than what they would otherwise provide if they didn’t have that feeling and that connection with their company.

We have what we refer to as our “S.T.A.R” values at Flagstar and it starts with “S” for service. So if you get the right people and they really like their company, and they really think the company cares about them, cares about their customers, their community then they will provide a level of service that’s needed to build trust in people—which is the “T”—and whether you’re building trust in your core colleagues in your company or your customers or your community, if you build that kind of trust, then it’s easy to embrace accountability, or the “A”. My strong belief is that if everybody in the organization is willing to be accountable, that there there’s no way the organization isn’t going to be successful.

And that takes us to the “R” for results. So all those behaviors that start by getting the right people and convincing them that the company cares and all the ways that I described causes behaviors that produce results. There are a lot of different ways that you build that kind of culture in an organization, but one of them is by being a diverse, equal and inclusive company. If you can do that, you’ve got a real recipe for success.

The second reason is, it’s just the right thing to do to treat everybody equally and to do the right thing by others and to help others if we can. For me personally, it really starts with the second one, but I do realize that that first explanation is important for the corporate world to understand and believe. And I, and I think there’s growing belief that that’s true.

How did you start moving on this at Flagstar

I couldn’t really deal with it early on in my tenure because the company was—well, it was failing. And so we really had to focus more on just saving the company and getting us to a point where we could be confident we were going to be around for a while. Once we got there, then it was easy because we had hired some people who believed in this and I tapped a couple of people on the shoulder and said, ‘If you will help, I’ll lead and we’ll make this happen.” It starts very modestly with a few people. Then once it really started to flourish and we started to get more interest within the company, then we decided we needed to formalize it. And that’s when Mary [Mbiya] took her position as our lead D&I person. And that’s when we started to really be more thoughtful and structured about it.

Then you get outside parties to help you figure out what it is you’ve got to do, because a lot of people didn’t understand it—I didn’t completely understand it. I mean, I knew that I wanted to be a better company. I knew that I wanted to treat people equally. I knew I wanted to look more like the community that we serve—but heck I didn’t know how to do it, you know? So you just empower people and say, I’m here. Tell me what you need me to do. And I’ll give you all the support you need and go do it. And fortunately, we’ve had some great people that really embraced it and made it easy for me to just do what I’m doing right now— showing up and I’m talking about it.

Is that key? For the CEO to talk about it?

The CEO has got to be really upfront. In my case, I’ve chosen to be very candid about my feelings, to the point where I tell people, if you don’t believe in this, go work someplace else. I’m very, very candid about that, that this is not the company for somebody that doesn’t believe in this. If you don’t like the Supreme court decision around Title VII [prohibiting discrimination against LGBTQ people] then you probably shouldn’t work here. If don’t like the Supreme court decision around DACA [maintaining protection for people brought to the U.S. as children], then you probably shouldn’t work here. That’s who we are.

Could this effort still be successful if you did not personally get it?

No, I don’t think so, because there are skeptics in the company and if the skeptics are allowed to have a reason to be skeptical, then it damages the whole effort. There’s gotta be unity—at least public unity. It doesn’t mean there aren’t people sitting in the corner at one of our offices somewhere saying, “Oh, I hate this”—I’m sure that there are—but they know they’re not going to be supported.

So on the accountability piece, how do you measure success on this and make sure you’re where you should be?

Metrics are important, measuring is important. Quotas are damaging and people tend to not support because then they think that there isn’t equality for those that are on the other side of this, but there’s almost nothing you can do successfully without measuring what you’re doing. I worry a little bit about some of the things I hear in Congress, and I’ve talked to some elected officials who are in positions advancing policy because I’m afraid that if Congress puts some requirement on that, it actually could be damaging.

But that said, the way I use metrics personally is to help me understand if the way that I’m leading this is being effective, because if it is, then I will see the needle move and if it isn’t, then the needle won’t move. It’s just that simple. I think it starts with your hiring practices. You have to force yourself, your HR team and your hiring managers to be very, very disciplined around requiring that every position—and I really do mean every, although I know it’s not possible always, but as much as possible, every position— that there’s a diverse slate of candidates put in front of the hiring manager, because I’ve said many times, you can’t choose a diverse person if you don’t have one to choose from. From my own experience as CEO, if I don’t do that, if I don’t say that and the CFO leaves, I guarantee the list I get will be all white guys, maybe a white female, because finding a minority candidate, whether it’s black, Hispanic or other minorities, you’ve got to work harder to find that person because they haven’t had the same opportunities to move up in institutions. So you have to seek them out. And we’ve really done that. We’ve taken months to fill executive level positions in order to make sure that we had diverse people to choose from. And I think that’s why we have a fairly diverse executive team at our company.

And then we have to do more in terms of preparing people that are already in our organization for advancement. We haven’t done things specifically for the minority community and I think maybe that’s a change we have to consider. We’ll be assessing how we might go about doing that.

Yes, one of the challenges CEOs tell us about is that, despite their efforts, they’ve only been able to move the needle further down in the organization, but find they have a “leaky pipeline,” where the diversity doesn’t make it up into the executive ranks. Have you had that problem?

Yes. I won’t use this as an excuse, but the minority candidates that would be eligible for advancement in our organization oftentimes leave for other opportunities. So what we’ve got to do is make sure that we’re creating the opportunities internally that interest them, so they don’t lose patience with our company and go elsewhere. We haven’t done enough around that for sure.

There’s also unconscious bias that may be impacting decisions—how do you deal with that? And how do you deal with your own implicit bias as a white, male CEO? 

Yeah, we all have unconscious biases. It’s something that you just have to constantly recognize that you may have a bias that you’re not aware of, so you have to be more thoughtful than maybe you otherwise would be when you make certain decisions. You have to make sure you are really practicing what you’re preaching and a lot of that is education, understanding better how other people think. So in my case, like with anything else that involves running the business, I read as much as I can about other people’s experiences. I don’t have a playbook that says, how do I know what my unconscious biases are? I just know I have them. I know that I got really careful about how I think and how I behave and what I say. And we have to communicate, especially during Covid.

At Flagstar, we’ve gone much further with communication than we had previously. In my case, I started doing a video every week. They started out being about COVID and how the company was coping with that and trying to help our employees cope with it. And then we had George Floyd and then it has gradually become more of a social discussion. And I find myself talking about things that I never have really talked about with the company. Maybe it’s because of a TV show I watched or something that happened in the news. I’m getting more notes from people than I ever have, and it’s causing me to interact with them, which is leading in some cases to setting up one-on-one video chats with employees. I’m learning a lot by doing that because I’ve spoken to people at every level of the company and would say the majority of them have been diverse employees. It’s really been a learning process for me. We’ve been able to talk very openly about unconscious biases as well as conscious biases. So I think it’s moved the needle a little bit and allowed us to be a lot more open about this sort of thing within our company.

That can be hard for some leaders, to let down their guard and express vulnerability, especially when you’re talking about race and worry you may say the wrong thing.  

Yeah. Sometimes you’re just blessed with certain abilities, and I think I’ve been blessed with the ability to express my feelings in a way that people really do feel is sincere. I’m not afraid of showing my emotions and I don’t need to be a tough guy. I believe you lead with humility. You don’t lead with toughness.

For decades, companies have tried to steer clear of social issues, specifically not taking a position on one side or the other. But after George Floyd, we’ve seen a lot of companies making their support of racial equality known.  What’s changed?

I  think we’ve realized as a country that we haven’t made enough progress on these issues. I grew up in Detroit and I was there in 1967 when we had some terrible things happen in Detroit. Unfortunately, the cause for that back in 1967 is the same thing we’re dealing with today. Now that doesn’t mean that we haven’t made progress—we have—but I think it’s clear that we haven’t made enough progress. And I think that the country was at a tipping point and you combine the Covid situation and people being locked out of everything, but their home and then we had this terrible incident happen.

I think that it’s taken what we as CEOs have as a responsibility to a new level. It’s incumbent on every organization to take a step up. And if you haven’t taken any steps, then take the first one. And if you had taken 10 steps, then take step 12 and 13. And if everybody does that, if everybody takes a step or two up from where they were, we will start to make a difference. We can’t sit back. It hasn’t worked to sit back. So we’ve got to step up.

I’ve said this from day one that we started talking about D&I: I’m not trying to change the world, man— I’m just trying to make this place better. Now I probably feel more of an obligation to step outside myself personally and try to share how I feel about things with others, which is why I took the CEO Pledge. And you know, we have about 1,000 companies in Michigan that have a lot of employees and I think we have only 20 or 25 CEOs who have signed on. I mean, come on.

Why do you think those numbers are so low?

I think people have been naive about the necessity, number one, for their companies to show their employees that they think this is important and they’re missing out on the very first thing we talked about when we started talking here, which is that it’ll make your company a better company, and they’re not understanding that. And they probably don’t believe it, you know? But if they take the time to get educated about it, they will believe it. And that’s really what I think we’re trying to do in these few initiatives that I’m getting connected with is to just put it out there. If you hear from fellow CEOs that can tell you how it’s helped their company, that can make a difference. I think we can get other CEOs to step up and realize this is part of their responsibility.